Even the Asian news is not good: Australia unexpectedly reported soft export figures (its second consecutive monthly trade deficit), raising concerns that economic activity is indeed slowing in Asia. The Aussie dollar is at two-month low; Chinese markets are closed for a holiday.
1) Much ado about nothing: Moody's downgrade of General Electric's (GE, formerly CNBC's parent company) credit rating, driven by a downgrade of GE Capital, sounds serious, but read the statement carefully: "The downgrades result from the implementation of Moody's revised global rating methodology for finance companies..."
In other words, Moody's changed its methodology, something GE was quick to point out. This sounds like a generalized concern about risks that all financial institutions are facing. Moody's made it clear that the downgrade of GE itself was due solely to the risks from GE Capital "rather than any deemed incremental risk related to GE's industrial business lines."
And what about GE Capital? Moody's says it is "one of the strongest financial companies in the world."
Hmm. This is unlikely to dramatically affect GE's funding costs, and it seems unlikely that it will prompt the Federal Reserve from preventing GE Capital from paying a dividend once again, likely in the second half of the year.Page 2 of 4 | Prev Page | Next Page